In Or Out: Making The Right Choice
Modern business practice demands more skills in-house. But it takes a lot of time and skill to hire the right person. When should marketers outsource?
Deciding which skills to bring in-house and which ones to outsource to agencies is one of the most difficult strategic decisions senior marketers are likely to make this year.
One of the side effects of modern business practice is the growing need to have more skills in-house. This may be because your business has been moving increasingly online or as a result of a larger digital transformation initiative.
For senior marketers facing this most challenging of strategic decisions, it’s worth giving some thought to the triggers and motivations for increasing headcount, and what the potential implications could be. Where does it make sense to expand your internal teams, and where not?
The Holy Grail of the modern business is customer insight—knowing what data you have, what relationship you need, what your customers are doing, and how you can help them do it better with you.
Long gone is the notion of building your own platforms for this kind of analysis. The tools can be anywhere, but their use in-house is essential.
Even if you have an internal team already, their output may not necessarily be that well-utilised to shape strategic decisions, and their skill sets may be misaligned with the abundance of data available. That makes it worthwhile looking at where the gaps may lie, and training up or buying in accordingly.
There is no excuse anymore. These capabilities should lie in-house.
The reliance on agencies to run and manage projects has always been a sensible way to test and explore the many new channels available. But as these “projects” become your “business,” the risks of outsourcing what is now the new core of your organisation start to grow.
Once your insights team is suitably staffed up to understand the impact of your business on your consumers and vice versa, then you are in a much better position to take broader strategic action. Who defines this action and where they sit will vary from organisation to organisation. Often the “digital and innovation leadership” functions exist well outside of marketing.
This is sometimes a contentious issue as your business may need to bring in substantially more senior people. Those new hires will inevitably upset the status quo; but it’s just as big a challenge when they don’t and corporate inertia outweighs the notional benefits.
One thing businesses need to watch out for is hiring somebody for the sake of it, just so it appears that the “innovation problem,” for example, is sorted. It’s a well-documented fail and one to avoid.
Telling your customers that your product is great doesn’t work nearly as well as showing them why your business is great.
How your brand behaves has moved up the agenda for consumers and modern marketing departments alike. To make this consistent could be as simple as having more content and customer support people in-house to manage your social channels directly, or it could mean becoming a totally transparent business of the future.
There is, however, a great temptation to meet this challenge by retraining and hiring the minimum of specialist skills. A common challenge this brings up is that many people simply want to “do the job,” not “be the brand,” even though that’s what you’re trying to achieve.
Equally, those people who have the herculean task of being omnipresent online are often misunderstood by those who don’t appreciate their work.
How you overcome these challenges is not as obvious as it seems. Whichever way you approach it, however—your brand needs to be in-house.
Even when you’ve worked your way through what to bring in-house and what to outsource, decisions ultimately come down to cost. The idea of reducing the cost of expensive agency partners and having those skills on tap in-house is very appealing, but the culture of your organisation will determine whether bringing digital talent in-house will success or fail.
There are multiple factors to consider before you start recruiting:
- There is a massive skills deficit in the digital world, making it sellers’ market, and one that makes people expensive.
- Millennials are more likely to have portfolio careers, so don’t expect them to hang around for too long.
- It can take almost as long to hire one person as it does an agency.
- If you’re not a digital native, you may not actually know how to hire the right people.
- Each headcount will require a business case, so instead of fighting with procurement you may find yourself fighting with HR.
- It’s easier to sack an agency than it is to sack a person.
- Those hired with “digital” in their title may find that there are no career prospects within the wider organisation and that they are already at the “ceiling.”
- The point is that cost shouldn’t be your prime motivator. Increasing your in-house skills should be about generating value , making yourselves more efficient, and building a more modern, resilient business.
So will everybody eventually move in-house, with massive teams and internal agencies?
Agencies are justifiably concerned about this trend as it signals the end of the long-term retained relationships of old—to be replaced by smaller specialist production budgets built around individual projects.
You could argue that this is, in fact, an existential crisis for the entire industry. Or is it?
There is also a pretty good case to go in the other direction. New online services appear every day replacing some of the more onerous tasks and, as such, the number of people required to maintain digital channels decreases, not the other way round.
With a strong knowledgeable core team, you can work more fluidly with multiple partners on multiple projects, which in essence means having the right people available rather than having lots of people. Therefore, many teams may actually shrink and outsource more to adopt the leaner, more agile approach used by the startup world.
Regardless of whether you are looking at the breadth or depth in your teams, it’s pretty clear that the shape of it all will need to change.